I just sold my first house, which I completely remodeled. I’ve lived in it for three years, so capital gains don’t apply. I’m about to be able to pay off all my credit cards, which means my company will be free of all debt. (Trucks and tools all paid off.) After that, I’ll have roughly $40,000 to play with. Since my current girlfriend would not be able to stand living in a remodel (moving room to room) like I did the first time around, we’re moving into an apartment. Before I buy a new house, I was thinking of trying to flip a couple cheap properties. A friend showed me how some houses have a high appraised value, but since they’ve been foreclosed on, the bank only wants what’s owed to them. Is it a good time to do this? The housing market in Cincinnati isn’t too hot, but seeing how Bush’s War and rising energy costs are about to cause recession, should I wait to by anything? Or should I buy something ultra cheap? I’m thinking of buying some ghetto property, using my personal Home Depot card to float the materials (over $299 and you don’t pay for six months or a year). As long as you follow HUD rules, couldn’t you fix up low rent houses, and make money on those? I don’t have a lot of money, but everyone’s got to live somewhere. I don’t mind if I make $30,000 in the hood or in suburbs, money is money. Anyone have experience with this? Is it too risky now? I’d thought about waiting to buy the next house to live in until the spring….or is that a bad idea do to rising interest rates?
BTW, I’m so tired of dealing with picky clients. I’d love to go to my own flip properties, take my dogs to work, and just work without someone breathing down my neck. Anyone out there doing this and making money, or am I doomed to be someone’s remodeling slave?
Replies
Lets put your post in order.
"BTW, I'm so tired of dealing with picky clients. I'd love to go to my own flip properties, take my dogs to work, and just work without someone breathing down my neck. Anyone out there doing this and making money, or am I doomed to be someone's remodeling slave?"
Sure , get to work on your dream. <G> I do it .
"I don't have a lot of money, but everyone's got to live somewhere."
From that statement you talk of using the depot 6 months no pay trying to figure out how to make this happen . So stay tuned ;
When I started out I lived in them until I could aford to buy them and live in my home . DW and I moved 4 times in 6 months flipping properties . It wasnt planned that way but was near impossible for her to work but she did it . Those flips in that six month period netted 60,000 dollars and was what we started our business . We both worked our jobs every day while WE did that not I.
Its important to have a partner that will stand beside you in swift water . Farmers wifes live in farm houses , not in town.
Of course hopefully it wont last long and you will become wealthy which she probably wont mind splitting with you. You said you have to live somewhere , but yes you have to start somewhere and those who run the race are deserving of the rewards.
Tim
Edited 10/18/2005 11:17 am by Mooney
Edited 10/18/2005 8:58 pm by Mooney
Its been working for me over the years better and better.
Doesn't matter how the market is. You pay and sell what the market will bare. Just don't wait too long. Living in them gives you the advantage of not holding two mortgages or a rent and a mortgage. There are downsides too but if you're loaded you can do what ever you want.In the meantime you have to "deal with it". Sure beats working for A holes!!!
I like what tim says and I agree more than whole heartily about the girlfriend.
Karina and me have been doing this for years going from one room to the next in one mess after another. Thing is....after a few and the more money we make...the next houses are easier and the conditions get better to live in while working on them. Don't let your girlfriend pull you down. Get the momentum up and keep it up and find a better cheering team that's on your side! Flipping cheap houses work...less money and risk... more expensive houses in the right hood have better payoffs and to me are way more satisfying. Its simply a matter of taste and what you can currently afford. Eventually with the more money we make the nore choices we'll have, one being living in a great house and having the cash to do another in decent hoods even still but untill then we keep plugging away.
Be well
andy
The secret of Zen in two words is, "Not always so"!
When we meet, we say, Namaste'..it means..
Cooper;
Tim has an interesting perspective. Do what you want to do. On the family part of it, I like the part about the farmer's wife.
On the business end, I personally would be careful about getting into an expensive property right now. If there's bad news for a while, you could be tied to the place for a while - maybe a couple years. You might be talking about something different (the hood) but I would not do a ghetto remodel either - first, you've got concerns about theivery, safety and tools while it's being done and when you are finished, the market for resale is not wonderful. I would try to find a decent neighborhood and a ratty house. It will be easier to sell. As far as the rates, they are probably not going to go up too much more, but the question is who is going to buy it, not can you carry it.
Don K.
a couple of comments ..
1) go to the bank and get a loan, the rate is allot cheaper than the HD credit cards at 20% pa after the first six monthes (be honest you ain't going to pay it off in 6 monthes)
2) don't put your current gf through it if you want to keep her, flip'n is your job .. she doesn't make you sleep at her workplace everyday ..
3) how do you guys handle insurance, it about 1000 a month here in Ontario, Canada if your doing major work, even if your living in it!!
ps .. yes it's great to work for your self ..
Wayne - On the cost of the money, I try to avoid loans as much as possible. My properties are paid for, and I have been able to cover expenses with cash that I had in the bank, together with a couple house accounts and credit cards for short term stuff. I am at a point right now where it would be a good thing to have some cash and have considered going back to a bank for a mortgage on one of the properties. I have too many projects going on and until I know exactley where the $$ is going, I'll just deal with it month to month.
As far as insurance, I'm not sure what kind of insurance you are referring to. Basically liability and comp isn't nearly as bad here as what you are dealing with.
There are a bunch of houses in my neighborhood in Columbus that could use renovating. This was once the premier neighborhood in town, but now it is a bit run down. Did you see the articles about mortgage foreclosurer in the Dispatch? That guy profiled in one of the sidebars owns a bunch of houses here. Like a million $ worth. Doesn't do a lick of work on any of them.
Old Towne East?
That's Olde Towne East. I pronounce it with the extra 'e's, since they are presumptious enough to include them.
Yup.
"That's Olde Towne East. I pronounce it with the extra 'e's, since they are presumptious enough to include them."I'll bet you're also one of the ones that puts those long pointy towers at each corner to let everyone else know how superior you are. ;)Yeah, our office a year ago was at Oak and Parsons. Lots of nice places, lots of not-so-nice ones too. Too bad. Never was able to pick itself up like the Village areas. And it seems like there's a lot of houses on Bryden with 'for sale' signs in the yards.How about Franklinton? Do you think the floodwall will allow that area to revive?
I'm not sure about Franlinton, or Hilltop for that matter. There are so many neighborhoods that COULD be really nice pleasant places to live. Mt. Vernon comes to mind.But how did they decline in the first place? Highways and suburbs? Or are people just not willing to work with older houses? Personally, I don't want great rooms, or eat in kitchens, or multi-purpose family rooms. Given the number of neighborhoods in decline, I'm not sure anything will bring them back, particularly the ones with small houses. At least in OTENA you can get a big house for less money.
Actually I still think South Clintonville has potential. Like I said I'm working out of town in Atlanta. A house that sells for 175K in Clintonville is an easy 450K in Decatur down here, and both are college areas with stable populations.
There are still lots of nice houses in Clintonville that need help.
Chris
Actually live a little south of Clintonville (technically 2 blocks from the border). You're right, lots of nice older homes, some of which could use remodeling. Problem is, everyone else is doing the same. Market seems to be crazy here. Recently had a double that I'd bought for $70,000 a little south of me, had it for about 10 years. Sold it last year for more than twice that. And the farther north you go, the houses go up $10,000 - $20,000 per block. And you're right, in other markets that's chicken feed. Don't know how people afford places like that.Not as knowledgable about Chillicothe, but used to do projects in Circleville for Berger Hospital. Lots of big, old beautiful homes there. Great place to raise a family too. Just too much to drive (we're city people, soft and lazy) :)
There is an interesting article in the 10/30 Dispatch about an area called "Steelington". It sounds like the lots might be a bit bigger over there. I couldn't believe how small the lots are when we came to Columbus. Why they didn't just build row houses I'll never understand.My wife would have loved to be able to pick Clintonville, but I thought it seemed to packed in. At least in OTE we have some spacing spread here and there. Of course, it came from arson, but nowhere is perfect, right?How's Atlanta treating you? I'm from Gainesville myself. Self-proclaimed poultry capital of the world. Big statue of a rooster in the town square.
Atlanta is treating me very well. I kind of prefer the midwestern college town style of Columbus but I'm making really good money down here.
What took you to Ohio? Do you think the economy there is getting better or worse? Also, what was it like to life in Gainsville?
Chris
My wife got a faculty appointment at OSU. Iowa State was the other option. I wanted Iowa State, but the OSU offer was significantly better. I can't tell what the economy is doing to tell the truth. I hate it here. The cost of living is high, and the government is pathetic. The simpliest of things can't be accomplished, like getting voters sample ballots that look like the actual ballot before the election. That is all it would take to reduce the lines on voting day, but they can't manage it.Gainesville was a small town when I lived there, 1961-1972. It was very much divided by class and race. Now I hear it is an upscale suburb of Atlanta. We had 3 acres on Lake Lanier near Buford where we were planning on building a house, but then we moved to Maryland.
I hated living intown Columbus also, we used to live in the Glen Echo area just north of campus which has improved somewhat.
Ditto the balot thing. I'm one of those guys who has voted 85% Republican who just hates George Bush.
What street in OTE? My wife and I almost bought on Wilson and then almost bought again on Bryden.
Chris
We are on Franklin, but closer to the west end than Franklin Park. In fact, we agreed to put our house on the holiday house tour this year, Sunday 12/4/05 from 1 to 7:00.http://view.exacttarget.com/?ffcd16-fe9516767461057a71-fe25157371640d7a731779-ff3111747064That's our on the middle left. The Lewis house.All these great houses, and we have no salvage facility, no decent historical help. And no one telling people to GET THE $@#*%^ IVY OFF THE HOUSE! I had to spend about $2,000 ripping the ivy off, and then about $8000 repointing. I had a tree growing out of a brick joint OVER THE ELECTRIC PANEL. Water just running down the inside of the wall.I would well imagine that any real Republican hates G. Bush. Ronald Reagan must be spinning in his grave. The Economist chararacterizes the administration as "Big Government Conservatism". Sounds like an oxymoron to me.
Franklin is a great street. The worst thing about the nighborhood is proabably the fact that no one can build decent infill housing there. Here in Atlanta I am in awe of some of the nice infill housing that is well done.
We may actually buy a house in OTE. We have been talking about it for twelve years or so but we have never gotten the guts to go ahead and do it.
There is one house on bryden (the small Italianette house about the 1300 block) that I would do anything to own...and so would my wife.
Chris
Let me know if you go for the house on Bryden. I'll do whatever I can to help. I know lots of contractors that you shouldn't call. You are correct about the in-fill problem, but I think the existing run-down buildings are a worse problem. There is some discussion in the new Near East plan about possibly letting vacant lots be absorbed by the neighboring houses.There are a couple of house on Franklin for sale, if you want to look.BTW, we are on the holdiay tour this year, if you want to see our house.http://view.exacttarget.com/?ffcd16-fe9516767461057a71-fe25157371640d7a731779-ff3111747064We're the one in the middle on the left.
Used to live in Ames, Iowa (mid to late 1960's). Mom was from Waterloo, Dad got his graduate degrees at Iowa State.You hate it here??? What's to hate? Highway shooters, coin scandals a 5-year old could figure out, one of the worst governors in the country, the highest home foreclosure rate in the nation, etc.. It makes life excitin', I tell ya!You won't get that in Ames. ;)
Let me re-phrase it. What is there to like? The only thing you can say, is "well the _________ isn't as bad here as ________".The highway shooter thing is kinda funny in a sick sort of way. We moved here from Montgomery Co. Maryland where we just had a real sniper. We get to Columbus, and then there is a highway shooter (not a sniper - snipers don't miss). Fortunately, they had just caught the snipers in Maryland, otherwise I was afraid we'd be blamed!
now, now . . . we have enough to feel inferior about. Don't start making fun of our shooters too . . . they're trying their hardest. :)
That must explain the deer over-population. The shooters can't aim!
I am an electrical foreman that sort of lives in central Ohio, but I am currently running a job in Atlanta Georgia because the commercial building climate in central ohio isn't so hot.
I have thought about both Olde Towne East and Frandklinton but right now I think Chillicothe or Circleville would be a better bet.
Franklinton does not have the nice architecture of OTE, GV, Italian Villiage, Vic villiage etc. and has lots of really crappy doubles.
Chillicothe and Circleville have lots of affordable older houses for sale in neighborhoods that one wouldn't mind living in...
Just a thought.
Chris
Cooper, that 40k should be plenty to do flips.
If you're operating in the hood, that 40k should be enough to pay cash and remodel!
If your operating in the burbs, that 40k will be a good down payment, and leave enough cash to remodel.
You should be buying wholesale. Buying wholesale means paying only 60% of fixed up fair market value. Deduct repair costs from your 60% offer.
In nicer neighborhoods, 70% will work.
Don't force momma to live in nasty remodels, if you can avoid it. You'd be better off to keep her in her home somewhere, do a little remodeling for cash flow, and do the flips on the side till you can stop remodeling.
If your working in the hood, you probably can get easily get some very good loans, including fix up loans from HUD.
Paying cash is good, but learn how many investors strive to take houses with no money, or very little money (perhaps $1000 or $1500) down. Learn and understand what "creative financing" is all about. You might not use any/all of the techniques, but then again it might open some doors that you don't understand are out there. That 40k can be a very powerful tool when you are taking a rundown property off of someone's hands that is motivated.
Google REIA and find a local investors group near you. You will learn a lot and develop an important network of contacts.
blue
No offense or disrespect to anyone, but I read these posts and smile. Around here, Boston suburbs, there are no fixer-uppers AFAIK. Maybe a few houses with "character" or "potential" running in the $300ks or so in modest neighborhoods. Till recently, people of all types including wannabe weekend remodelers bidding them up. There's indications things are slowing down a bit, slowly and only a tad, and who knows for how long.
Yeah well I can buy an 800 sq ft fixer upper here for $239,000. complete with polluted lake, high groundwater, overflowing septic and polluted well!
Oh yeah, we're standing in line!!
Sadly, people are buying them. Not me.
EricIt's Never Too Late To Become
What You Might Have Been
[email protected]
Ahhhh, still nice to live in an area where you can buy an occasional one for under 20k. DanT
Dan - Where are you from?
My DalmostW just closed on a 2 bedroom yesterday, on 1/2 acre for 20K. Cute little place, needs a heating system and cleanup to be a rental, and my rental manager is already looking for tenant. (This one's in VA not NY.)
Don K.
Central Ohio. A town of about 40k. Just saw a house sell for 12k. Drove past it and it was not bad for the money. DanT
Having worked for a guy that bought houses ,some ok some worse, I learned one thing. You or I might not want to live there...but there is someone else who does.
Keith
Sure is, fixing and renting/selling 20k houses is my bread and butter <g>
Sure is, fixing and renting/selling 20k houses is my bread and butter.Jeff, How can you find houses for 20K. I live in Northern New Jersey, 20 miles from New York City. I found a fixer upper, abandoned for 2 years, bad shape. 2 bedroom/1 bath, for 200K in 2001. I moved in to it and I now have a fixer upper that is a four bedroom/1 bath for 450K. It still needs a lot of work but people will line up to buy a house commuting distance to NYC.Danny
Well, I live in rural Missouri, in a town of 3,000 people. About 100 miles away from a major city (St. Louis), so basically far enough from anything important to have prices low. Houses are just starting to be built in my town that break the 200k mark, and the people that live in those houses aren't even from here. The 20k figure is for a house that's been empty and neglected for a number of years that needs extensive work. That's also from a private individual, the few I've bought at that price were from very "motivated" sellers.So while the investment is small, the gain can also be small. Just a scaled down version of most places.
Compare that to Ulster Cnty. I looked there not long ago. Cost as much as where I am now.The secret of Zen in two words is, "Not always so"!
When we meet, we say, Namaste'..it means..
I honor the place in you where the entire universe resides,
I honor the place in you of love, of light, of truth, of peace.
I honor the place within you where if you are in that place in you
and I am in that place in me, there is only one of us.
"Compare that to Ulster Cnty. I looked there not long ago. Cost as much as where I am now."
Hey Andy,
It's the same almost everywhere. Five years ago you could buy a house in the hood in Milwaukee for 5 grand. Now even those go for upwards of 60K, and you have to deal with the crime. Very common for re-habbers to have all their stuff cleaned out overnite right down to the plumbing and furnace.
Personally, I think the re-hab craze is a direct result of the change in capitol gains on real estate laws. But both you and I benefit when we sell ours.
Jon B.
BTW, I might be able to drop by in a week or so as I will be working in NY for a couple of weeks.
BTW, I might be able to drop by in a week or so as I will be working in NY for a couple of weeks.>>>>>>>>.Cool...you might not recognize the place though : )The secret of Zen in two words is, "Not always so"!
When we meet, we say, Namaste'..it means..
I honor the place in you where the entire universe resides,
I honor the place in you of love, of light, of truth, of peace.
I honor the place within you where if you are in that place in you
and I am in that place in me, there is only one of us.
Andy,
What, no more teepee? lol
Jon
Someone just purchased a property with two buildings on it consisting of three rental units. The property was listed for 169k. The buildings are in poor to fair condition an in a flood zone. I have seen six feet of water on the ground floors twice. The sold sign went on after three weeks of listing.
I wonder if the new buyers know about the flooding,if those homes were 10 feet higher they would be worth more than double the asking price. Sooner or later they will wake up with a piano floating around their living room.
Haven't heard from you in a while!
Whacha been up to?
EricIt's Never Too Late To Become
What You Might Have Been
[email protected]
If I am not working I am working on the house. Tomorrow I may cut some steel and start the bed for the sawmill I have been planning to build for a few years.
It has been raining constantly and I hope the roof leak that has plagued this house since the roof was new has stopped I have been up there more than I want to be. Every time I think it's fixed it leaks in the same exact spot. I can't see the apparent path of travel for the water.
Got a lake in the center of the valley here. Wasn't there a year ago, but it comes and goes.
There's a woman with her house about half under water.
She's blaming everybody but herself. The lake is on the maps, the previous owners tried to sue the county in 95 when it flooded, but didn't say anything when they sold it to her a few years ago.
The lakes still there, there's snow on the mountain behind me already and winter hasn't started. That lake is gonna get a lot more run off next spring and some others are going to have to learn to swim.
Joe H
The developer selling the flood properties should have bulldozed them. They are building 46 new $700,000 + homes on non hazard prone locations in their new subdivision. I guess they need every cent they can get out of this project.
I just wonder if the new buyers for the flood prone property have a clue about it. They may think they got a great deal on these fixer uppers.
A friend showed me how some houses have a high appraised value, but since they've been foreclosed on, the bank only wants what's owed to them.
This sounds like the best situation to me. The high appraised value means the markets willing to pay for it, and the foreclosure means you can pay quite a bit less then that. If you come in and make it shine, do some landscaping, painting, new carpet, etc... you can probably get the most bang for the buck. I live in Northern Virginia and wish there were opportunities like this.
I have a friend who's part owner in a real estate company that fixes and sells. He buys mostly in the rougher neighborhoods because there's more opportunity to buy cheap and sell high. Sure, we'd all like to work in the nice neighborhoods but those houses go for $200k OVER assessment and they may not have been remodeled in 30 years!!
Later-
Kevin
A friend showed me how some houses have a high appraised value, but since they've been foreclosed on, the bank only wants what's owed to them.
So, why isn;t he buying them? And with a gazillion agents and everyone else looking for the same thing why would you think the bank wouldn't spit thee deals at their board buddies, sounds to me like your friend is pumping you up for something.
http://www.shelladditions.com
Edited 10/18/2005 9:41 pm ET by shellbuilder
Here's another spin - Buy a house ripe for a reno, put a tenant in it that won't mind living there while you work on it at reduced rate. Now you are a landlord, and 'improvements' are deductible. When finished, move into the house and put your tenant into the next one (if he can stand it). Wait until capital gains doesn't apply before selling that 1st one, tho.
All the best...
To those who know - this may be obvious. To those who don't - I hope I've helped.
Your questions are not easly answered without a good knowledge of the area.
Problems in the getto can include everyday theft and vandalism.
Do not overlook areas outside the city. Around here you can find properties with small or large acerage, including a home outside the city. The property can be subdivided. I have set aside commercial frontage for future development and growth. Also, mini-storage and mobile home lots can be a good investment.
I am a custom home builder and currently own 10 rental properties and 100 acres as described below.
Mobile home lots (what builder likes mobile homes) are relatively easy and low maintance. I currently own 100 acres with the original farm home, and have 10 mobile home lots that pay the land note plus. We have restrictive and enforceable covenants which keep the property nice. I set up the lots on just 4 acres in an area shielded by a creeek and trees from the balance of the property. We are developing tha balance of the property for new home lots.
Screening renters is very important. So far, so good.
Im beginning to think this guy is gonna be like No Show Jones!
Tim
Nothing ventured nothing gained.
Certainly there are fears of failure, but some of my biggest failures lead to big success.
The only way to protect against failures is to never do anything, and that in itself is a big failure.
Wisely, I have been told that the differance between a loser and a winner is that a winner is a loser that never quits.
I think some folks may be technically challenged and are unable to find thier way back to the thread especially if it is their first time here.
Any of you give him a shout via email?It's Never Too Late To Become
What You Might Have Been
[email protected]
Thanks to all for the great information. I've actually replied a few times, but I'm waiting for my battery to return from the recharge company, and when the cord loosens, it erases the message. (I've lost a couple long replies.)
The important thing is that I was able to clean important tips from all of you. Thanks for taking the time to reply.
Today at work it reinforced my desire to work on my own projects. We started a full attic remodel, including adding a bathroom last October. The client wanted to save money by doing the tile herself. I was fine with it, since I knew she wanted to use those irritating hexagonal mosaic tiles that have to be filled in around the edges. (She thought that using smaller tiles would be easier!) A year passes. She still hasn't tiled the bathroom. Finally, she calls me since the permits are about to expire. Will I tile it? Ok, I agree to, since she's got the rest of the contract money she owes me tied up until I can finish the bathroom (Held up $3500, and all I have to do is put in the toilet, pedestal sink, and the shower surround.) I use Xactimate to price my bids, but she complains when I send he the bid with overhead and profit broken out. I finally agree to do it T & M just to get it down. After three day of setting tile, she informs me just before I'm going to begin grouting, that the walls will be grouted white and the floor grouted black! (The hexagonals are white tiles!) I cannot tell you how difficult and annoying it is to use black grout on white tiles on the floor and attempt not to get any on white grouted wall tiles! I finished the shower in two hours (3 x 3) having changed the water 4 times! Since I knew she'd be upset if it cost $400 to grout the floor, I told her to grout it herself, and call me when she's ready for fixtures!
Man, I'm so looking forward to doing my own thing!
TX - I will take issue with your statement about mobile homes being no maintenance. I have two out of several properties, and they have been the most annoying of any of them. They freeze in the winter, leak when it rains, are built out of old cardboard boxes and don't command near 'enuf rent to justify the effort. I just told my broker to get me numbers of what mine are worth, cause I am seriously thinking about selling one or both and moving back into REAL houses.
Don K.
Maybe he was talking about mobile home lots.
I had MH's and they were a pain.
Wish I'd never sold the little mobile home park I had, though.
Hard Eight Bar B Que, Brady, Texas
"Always bet the Hard Eight!"
The biggest obstacle in flipping properties involves being able to buy the home at "wholesale" and then be able to sell at "retail".There are many many many junk homes that were never taken care of. They deteriorated because the owner could not afford to pay the high prices for remodeling and maintenance. The owner did not have the skills to do the work himself.These homes come up for sale and the realtor marks the price down 10% and calls it a handyman special and the house sells.These houses will not work for you and you will find out the hard way what happens when you pay too much for a propertyand then can't sell it and in desperation then try to find a way to break even (get your investment plus the money you paid for materials). On a deal like that you will receive no money for your labor.I don't want to rain on anyone's parade and I'm sorry but that's the real world.
Cooper - Have you heard of FHA 203K rehab loans? We stumbled onto them a few years ago when buying a rental unit. Perfectly suited to what you want to do.
I don't remember the exact details, but I'm pretty sure we could borrow 90% of 110% of what the building would be appraised at AFTER we did the rehab. But you get the loan before you purchase and rehab the building.
So basically, you are using very little of your own money to purchase the building and hire yourself to rehab it.
The only catch is, many bankers don't like to write these loans. They have to be done in a very specific way, which requires more work for the bank. We were lucky enough to have a lender say "hey, have you considered a 203 rehab loan?" or we might never have heard of them.
I've often thought someone could make a nice little business out of buying fixers with these loans, rehabbing the building, then either selling to realize a profit, or renting to build equity for later resale, depending on local markets and when you want to realize your gains.
Anyways, it might take a little digging, but those loans might be just what the doctor ordered for what you want to do.
Jim, it's not really that hard to get info on this type of loan.
This is the hud.gov website link to those loans http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm
blue
Thanks, Blue.
You misunderstood my post. I do not maintain the mobile homes. The mobile homes belong to individuals. The only thing I do is provide the space. Maintance of the spaces is easy, and although you may picture a mobile home mess as is somtimes the case....we have covenants and requirements for upkeep, skirts on the homes, landscaping. clean yards, etc.
Freezing....we live in Texas. Our coldest month is February. february has an average temp of 61 degrees.
TX - A couple years ago I was offered a park of about 16 units, with room for a few more for about 200K. It was laregly what you have - lot rentals, with two freestanding wood dwellings. I did not jump on it and somebody else did. I kind of kicked my self for a bit, but felt a little better when I heard the septic system for the place (cost 50K) did not pass Health Dept. inspection. I was glad i didn't have that problem to deal with. I've seen some nice parks that are well kept. This one was not one of them. It would have been an effort to get it cleaned up and keep it well run. An on site manager was necessary, and I'm still 500 miles away, so I'm probably better off. Glad it's working for you. Don
I think 5 or 6 years ago I offered 120 for 12 trailers , a couple more spaces but I think max would have beem 14 trailers. Then it has a travel trailer section holding 4 units close to the hwy. It had a 3 bed 1 bath house that was "ok" that an on site manager used for free. It also had an old laundry mat that needed remodeling . I forget the acres but I offered and he accepted it . When I brought the contract out he wanted to keep a half acre. I said no and the deal was off . The park brought in 2400 per month not including the house which I would have rented as Im only 2 miles away.It would have brought 500. I still shoulda done it dadgum it , but he welched on me and I didnt get over it .
Tim
Win some lose some. I do not think I will enlarge the park. I would rather develope and build real homes...already have a natural barrier (Creek and lots of trees) between the mobiles and home sites.
I dug a small pond on the land and the cub scouts caught some fish two weeks ago during a camp out....two catfish and a perch. I have never stocked or placed fish in the pond.
I have built for many, and truly enjoy what I do, but working on your own stuff, be it land improvement, your own new home or flippers is definately more rewarding.
I live in Texas 40 miles southwest of Houston, the growth wave is steadily moving this way. Land values have tripled since I purchased this land 5 years ago. Fortunately I have some horses, a few cows, some sappling oak trees we are growing and a few grape plants. I am tax exempt (ag use) on the 96 acres. A business associate of mine developed some land, cut in the roads, installed the infrastructure and continued to cut and bale hay on the lots until they were sold. He received the tax exemption until the lots closed.
See my reply to another post titled "Buying and Selling real estate" that may of interest. I would invest outside Cinn, or midwest for that matter (I'm in IN). Cinn-Middletown area had a 0.7% appreciation rate, hardly worth the effort (http://www.realtor.org). See Research>Existing Home Sales>Meto Area Prices. The western states will serve you best.
I had been doing what your thinking about for 10 years. It was great, but we are getting out of it for now. The market changed here suddenly (twin city suburb), leaving us with two propertys that would not move. We have been making $5,000 in monthly house payments, and have dropped $60,000 off our selling prices. We just sold one property we have had since dec. We still walked away with some profit ,if you don't include my labor! We also can't find good propertys anymore because so many people think they can do it, and they are paying way to much for these propertys. It can be good, but be careful, if the market changes when you are in deep, it can ruin you.
Paulny, your situation demonstrates the risk of dealing in high end propertys. The 5k per month house payments will eat up a normal wage earners' capital very fast. The inherrent risk involved in those numbers should make mose blue collar workers pause and think before they take the plunge. The rewards can be great, but the risk is also very high.
There are ways to reduce that risk, but the rewards are also reduced. I'm choosing to hedge my bet by bringing on deeper pockets and thus sharing the rewards. The benefit to me is that I get to play in the game without any real risk to me. At this stage of my career, that is an imporant element, especially given the current worries about a possible bubble burst.
blue
.....anymore because so many people think they can do it, and they are paying way to much for these propertys.
You also have to compete against the government assistance some buyers are getting."All men's miseries derive from not being able to sit in a quiet room alone." Pascal